Bear Radar

Style Underperformer:

• Small-Cap Growth -1.75%

Sector Underperformers:

• 1) Coal -2.44% 2) Biotech -2.22% 3) Social Medica -2.20%

Stocks Falling on Unusual Volume:

• CBSO, MEAS, GTAT, USLV, NEWS, TU, VJET, NSTG, EUFN, LGND, GLOG, COV, FNHC, ENTA, TTPH, TDW, KS, FPRX, SRPT, GALT, ACRX, RCI, CRH, BECN, LGIH and UIHC

Stocks With Unusual Put Option Activity:

• 1) EWJ 2) M 3) MBI 4) HES 5) XME
  

Stocks With Most Negative News Mentions:

• 1) GTAT 2) NFLX 3) TSLA 4) XONE 5) UAL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value -.61%

Sector Outperformers:

• 1) Utilities +.27% 2) REITs +.03% 3) Ag -.15%
  

Stocks Rising on Unusual Volume:

• BDSI, KNDI, BBRY, INVN, CRUS and UTEK

Stocks With Unusual Call Option Activity:

• 1) ACI 2) KLAC 3) AFSI 4) VRS 5) INVN

Stocks With Most Positive News Mentions:

• 1) F 2) AMAT 3) KING 4) BBRY 5) BDSI
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• Ukraine Chases Rebels From Strongholds as Showdown Looms. Ukraine’s army turned the tide against pro-Russian insurgents with its biggest victories of a three-month campaign, sending the rebels fleeing to the eastern strongholds where they have vowed to make a stand. After recapturing Slovyansk and Kramatorsk, government forces secured control of the Donetsk region towns of Artemivsk and Druzhkivka, military officials told President Petro Poroshenko yesterday. The insurgents are bolstering defenses in Donetsk in preparation for an onslaught, Denis Pushilin, leader of the self-declared Donetsk People’s Republic, said on Twitter. “There are a lot of tests ahead,” Poroshenko said. The government plans a “complete blockade” of Donetsk and the region’s other main city, Luhansk, that will force rebels to lay down arms, Inter TV cited Mikhailo Koval, deputy head of the National Defense and Security Council, as saying. 

• Saudis Alert to Enemies on Both Sides of Iraq Schism. Saudi Arabia is a target for both sides in Iraq’s deepening conflict, one reason it has ramped up security levels to confront a threat that’s more immediate than the Arab Spring revolts three years ago. The world’s biggest oil exporter convened its national security council for a rare meeting under King Abdullah, and has bolstered defenses at the border with Iraq, where militants last month seized several cities and declared an Islamic state. The king vowed to protect the nation’s “resources and territory and prevent any act of terror.”

• Teenagers Under Siege as Murders Haunt West Bank. Almost every weekend, Dvir thumbs rides through the hills of the West Bank to the Jewish settlement where his family lives. The murder of a neighbor on a similar journey home won’t change the 16-year-old’s routine. “The terrorists want to scare us, they want us to leave this place, but this is how we live,” said Dvir, a crocheted skullcap pinned to his close-cropped hair as he mourned Gilad Shaar, who grew up next door in the settlement of Talmon. “Our response is to be together now and help one another, and to believe even more in our mission to live here.”

• Emerging-Markets Hedging Costs Jump as End of QE Looms: Options. China's weakening growth prospects and the imminent end of Federal Reserve stimulus are spurring traders to scoop up protection on emerging-market stocks. The cost of bearish options on the iShares MSCI Emerging Markets ETF rose to the highest level in more han a year relative to bullish wagers last week, Bloomberg data show. Options pricing in a 5% decline in the emerging-markets ETF on June 23 cost 4.6 points more than wagers betting on a 5% increase, according to three-month implied-volatility data compiled by Bloomberg.

• China’s New Economy Stocks Selling Off With the Old. After surging at least 20 percent for the biggest gains in China’s stock market last year, gauges of technology, health-care and consumer shares have all lost more than 6 percent. The companies, tied to what analysts have dubbed China’s “new economy,” are now falling in tandem with “old economy” stocks in state sectors such as commodities and finance that fueled growth in the last decade. All 10 industries in the CSI 300 Index sank in the first half, the broadest losses in four years.

• Lagarde Signals Cut in Global Growth Forecast as Investment Lags. International Monetary Fund Managing Director Christine Lagarde signaled a cut in the institution’s global growth forecasts as investment remains weak. “The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment” spending remains lackluster, Lagarde told the Cercle des Economistes conference in Aix-en-Provence, France.

• ECB’s Noyer Warns Euro Area Against Giving Up on Deficit Cutting. European Central Bank Governing Council member Christian Noyer warned euro-area governments against giving up on deficit reduction or looking to use a debt build-up to bolster growth. “No country today has sufficient credibility to put in place a strategy” of financing public infrastructure with a major debt increase, Noyer said today at the Cercle des Economistes conference in Aix-en-Provence, France. “Decades of of deficits have created profound skepticism. The current balance is fragile and any significant deviation from the current budget trajectory would probably be paid for, in a volatile environment, with higher borrowing costs.”

• German Manufacturing Orders Decline on Geopolitical Risks. German factory orders (GRIORTMM) fell more than economists expected in May as geopolitical risks weighed on confidence in the strength of Europe’s largest economy. Orders, adjusted for seasonal swings and inflation, fell 1.7 percent from April, when they rose a revised 3.4 percent, the Economy Ministry in Berlin said today. Economists forecast a decline of 1.1 percent, according to the median of 30 estimates in a Bloomberg News survey. 

• Bond Anxiety Grows in $1.6 Trillion Repo Market as Failures Soar. In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system’s plumbing is beginning to rise. The Federal Reserve’s bond purchases combined with demand from banks to meet tightened regulatory requirements is making it harder for traders to easily borrow and lend certain desired securities in the $1.6 trillion-a-day market for repurchase agreements. That’s causing such trades to go uncompleted at some of the highest rates since the financial crisis. 

• Dollar Gains as Treasuries Slide on Rates Speculation. The dollar strengthened against major peers and Treasuries fell amid speculation a stronger U.S. labor market means the Federal Reserve may raise rates sooner than anticipated. Asia’s benchmark equity gauge traded near a six-year high and oil fell with gold. 

• Goldman Sachs(GS) Brings Forward Rate Forecast as Treasuries Fall. Goldman Sachs Group Inc. brought forward its forecast for the Federal Reserve to raise interest rates after U.S. employers added more jobs than forecast, sending Treasuries lower for a fourth day. The Fed will increase its benchmark in the third quarter of 2015, rather than the first three months of 2016, Goldman Sachs Chief Economist Jan Hatzius wrote in a report yesterday. The investment bank joins companies including JPMorgan Chase & Co. and Bank of Tokyo-Mitsubishi UFJ Ltd. in moving up its Fed estimates.

• Plunging Unemployment Bolsters Case for Earlier Fed Rate Rise. A plunge in U.S. unemployment to the lowest level in more than five years bolsters the case for Federal Reserve officials to raise the main interest rate earlier than they forecast just three weeks ago.

 Wall Street Journal:

• Pro-Russia Rebels Prepare Last Stand in East Ukraine. Separatist Leaders Say Evacuation From Slovyansk Was Strategic. Ukraine neared a final showdown with pro-Russia rebels on Sunday, after Kiev forced insurgents to retreat to the last major city they control and Moscow showed no signs of intervening to help them. On Sunday, Ukraine said it plans to lay siege to Donetsk, a regional capital of one million residents that is the political and economic center of eastern Ukraine, and pursue rebels who fled there from Slovyansk, which had been the base of rebel military resistance in the region until government forces recaptured it over the weekend. Rebel forces, meanwhile, also appeared to be readying themselves for a fight for Donetsk, the proclaimed capital of their breakaway republic.

• Insurgents in Iraq Seizing Advanced Weaponry. Arms Turning Up in Battles and Military-Style Parades in Iraq and Syria.

• Political Battle Over Export Bank Heats Up. New House Leadership, Conservative Groups Seek to Shut It Down. Lawmakers at a recent House hearing on the future of the Export-Import Bank were given an extra piece of reading material: a personalized index card laying out exactly which companies in their districts benefit from the financing agency and how many people they employ.

MarketWatch.com:

• ECB: We're aware of asset bubble risk. European Central Bank executive board member Benoit Coeure says the bank's current monetary policy of interest rates close to zero for a long period increases the risk of asset price bubbles. Mr. Coeure said the International Bank of Settlements is right to point at the risk that cheap money may generate exuberant rises in some asset prices in the euro zone posing a systemic crisis risk when eventually bursting.

Fox News:

• US increases security at foreign airports, focus on cellphone, other electronic devices. Passengers taking international flights into the United States now must have their cell phones and other electronic devices pass additional inspection before boarding planes, as part of the Transportation Security Administration’s most recent strategy to protect against the threat of a new type of terror attack.

CNBC:

• U.S. moves toward opening skies for commercial drones. The U.S. air safety regulator is drafting rules to permit small drones to be used for commercial purposes, a step toward allowing remote-control planes and helicopters to be deployed for everything from TV news coverage to monitoring crops.

• France hits out at dollar dominance in international transactions. France's political and business establishment has hit out against the hegemony of the dollar in international transactions after US authorities fined BNP Paribas $9 billion for helping countries avoid sanctions.

Zero Hedge:

• These Are The "Worst Possible States To Live In" As Ranked By Their Residents.

• Yellen Is Flat-Out Wrong: Financial Bubbles Are Caused By The Fed, Not The Market.

• McClellan Sounds "Alarm" Over Stock Market Drawdowns. (graph)

• Charting The Death Of The Saver. (graph)

• Pro-Russian Rebels Flee Slavyansk After "Massive Shelling", Demand Putin's Help To Avoid "Genocide".

• For All The Bond Bears Banking On Inflation. (graph)

• Taliban Sets 400 'NATO-Supplying' Oil Tankers Ablaze In Afghanistan.

• Productivity Can Return If The Central Banks Would Give It A Chance.

• ISIS Head Makes First Video Appearance.

• Congressional Panel Accused Of Leaking Insider Information, Refuses To Comply With Probe.

• "Making Investment Decisions Based On Fundamentals Is No Longer A Viable Philosophy".

• Excluding Oil, The US Trade Deficit Has Never Been Worse. (graph)

• 5 Things To Ponder: Under The Surface. (graph)

• Costs? US Sales To Russia Hit Record High After Sanctions. (graph)

• What Your "Startlingly Intimate, Voyeristic" NSA File Looks Like.

• "There Is No Honest Pricing Left" - The Epochal Error Of Modern Central Banking.

• Why Obamacare Is Pushing Up Health Insurance Premiums.

• Foodflation - Since QE3, Breakfast Is Up Over 24%.

• Current 'Wealth' Is Transitory: "The Risks Of Failing To Act Should Not Be Underestimated".

• What Next For Ukraine - Ethnic Cleansing?

• Nothing's Cheap Anymore. (graph)

• European Banks Are In Trouble. (graph)

Business Insider:

• Here's Another Obvious Sign Of Inflation Coming...

• Two Visions Of China's Future Are Colliding On Hong Kong's Streets.

• Ukraine Scored A Huge Symbolic Victory By Retaking A Russian-Backed Rebel Stronghold.

• ISIS Issues Passports Warning It Will 'Deploy Armies' If The Holder Is Harmed [Report].

• The Illusion Of Central Bank Control Is In Full Force.

• China Is Failing To Woo Western Investors.

• Russia Has Effectively Invaded Eastern Ukraine — The Question Is How The West Will Respond.

• The Failures Of The Arab Spring Were A Long Time In The Making.

• Israel Sends Their Biggest Message To Hamas In Years.

Wall Street All-Stars:

• Indicator Update: Time for a mid-course correction?

Reuters:

• Dubai's finances stronger but still vulnerable, IMF says. Dubai's ability to finance its debts has improved because of stronger economic growth and more conservative spending, but the emirate would still be vulnerable in a major dowturn of the global economy, the International Monetary Fund said.

Financial Times: 

• US warns China over tech trade deal. European Central Bank executive board member Benoit Coeure says the bank's current monetary policy of interest rates close to zero for a long period increases the risk of asset price bubbles. Mr. Coeure said the International Bank of Settlements is right to point at the risk that cheap money may generate exuberant rises in some asset prices in the euro zone posing a systemic crisis risk when eventually bursting.

Telegraph:

• The Obama years: 'The trailers were great, the movie was horrible'.

FAS:

• Lautenschlaeger Sees Non Need for ECB to Buy Govt Bonds. Sabine Lautenschlaeger "doesn't see government bond-buying on the horizon, ECB Executive Board member says in interview.

Xinhua:

• Xia Bin Says China's Property Market Downturn 'Certain'.  Long-term downturn in China's property market is "certain," Xia Bin, a former adviser to the People's Bank of China and a researcher with the Development Research Center of the State Council, says today at a forum in Tianjin. It's important to prevent outbreak of systemic risks following decline in property prices, Xia is cited as saying.

Night Trading

• Asian indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 99.0 -2.25 basis points.

• Asia Pacific Sovereign CDS Index 70.5 -1.0 basis point.

• FTSE-100 futures -.04%.

• S&P 500 futures -.10%.

• NASDAQ 100 futures -.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases

• None of note

Upcoming Splits

• (ALK) 2-for-1

Other Potential Market Movers

• The Japan Trade Balance, German Industrial Production report, (AMAT) analyst briefing and SEMICON West could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by real estate and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.

Weekly Outlook

Week Ahead by Bloomberg. 
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising Mideast turmoil/Ukraine-Russia tensions, technical selling, profit-taking, emerging markets debt angst and yen strength. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

• S&P 500 1,985.44 +1.44%*

 The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,985.44 +1.44%

• DJIA 17,068.26 +1.32%

• NASDAQ 4,485.92 +2.44%

• Russell 2000 1,208.15 +2.32%

• S&P 500 High Beta 33.97 +2.44%

• Wilshire 5000 20,820.09 +1.53%

• Russell 1000 Growth 923.97 +1.83%

• Russell 1000 Value 1,002.76 +1.09%

• S&P 500 Consumer Staples 464.14 +1.15%

• Morgan Stanley Cyclical 1,623.90 +2.10%

• Morgan Stanley Technology 977.15 +2.33%

• Transports 8,294,74 +1.78%

• Utilities 554.27 -2.76%

• Bloomberg European Bank/Financial Services 107.84 +1.24%

• MSCI Emerging Markets 43.92 +1.65%

• HFRX Equity Hedge 1,184.61 +.84%
• HFRX Equity Market Neutral 965.91 +.46%

Sentiment/Internals

• NYSE Cumulative A/D Line 230,670 +1.01%

• Bloomberg New Highs-Lows Index 538 +379

• Bloomberg Crude Oil % Bulls 19.35 -50.88%

• CFTC Oil Net Speculative Position 445,840 -2.86%

• CFTC Oil Total Open Interest 1,759,554 +2.25%

• Total Put/Call 1.02 +22.9%

• OEX Put/Call 1.15 +17.35%

• ISE Sentiment 113.0 -19.86%

• NYSE Arms .56 -62.16%

• Volatility(VIX) 10.32 -11.26%

• S&P 500 Implied Correlation 45.87 -7.95%

• G7 Currency Volatility (VXY) 5.17 -4.08%

• Emerging Markets Currency Volatility (EM-VXY) 5.85 -.17%

• Smart Money Flow Index 11,522.21 +1.58%

• ICI Money Mkt Mutual Fund Assets $2.569 Trillion +.51%
• ICI US Equity Weekly Net New Cash Flow -$1.312 Billion

• AAII % Bulls 38.5 +3.5%
• AAII % Bears 22.4 +6.2%

Futures Spot Prices

• CRB Index 306.74 -1.69%

• Crude Oil 103.77 -1.66%

• Reformulated Gasoline 301.3 -1.01%

• Natural Gas 4.37 -1.71%

• Heating Oil 291.72 -1.80%

• Gold 1,321.30 -.49%

• Bloomberg Base Metals Index 201.83 +2.45%

• Copper 327.0 +2.43%

• US No. 1 Heavy Melt Scrap Steel 357.0 USD/Ton unch.

• China Iron Ore Spot 96.50 USD/Ton +1.69%

• Lumber 338.10 unch.

• UBS-Bloomberg Agriculture 1,402.35 -4.74%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 4.3% -10.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index .1095 -6.0%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.27 +.26%

• Citi US Economic Surprise Index -9.70 +14.0 points

• Citi Emerging Markets Economic Surprise Index -9.0 -2.90 points

• Fed Fund Futures imply 42.0% chance of no change, 58.0% chance of 25 basis point cut on 7/30

• US Dollar Index 80.27 +.32%

• Euro/Yen Carry Return Index 144.88 +.29%

• Yield Curve 213.0 +6.0 basis points

• 10-Year US Treasury Yield 2.64% +11.0 basis points

• Federal Reserve's Balance Sheet $4.334 Trillion +.19%

• U.S. Sovereign Debt Credit Default Swap 19.22 +13.28%

• Illinois Municipal Debt Credit Default Swap 168.0 +5.27%

• Western Europe Sovereign Debt Credit Default Swap Index 31.08 +8.41%

• Asia Pacific Sovereign Debt Credit Default Swap Index 70.52 -3.85%
  

• Emerging Markets Sovereign Debt CDS Index 191.72 +1.74%
  

• Israel Sovereign Debt Credit Default Swap 76.50 -.95%
• Iraq Sovereign Debt Credit Default Swap 334.77 +1.55%

• Russia Sovereign Debt Credit Default Swap 183.31 +5.35%

• China Blended Corporate Spread Index 300.47 -3.05%

• 10-Year TIPS Spread 2.26% unch.

• TED Spread 22.75 +1.25 basis points

• 2-Year Swap Spread 13.25 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -11.0 -1.25 basis points

• N. America Investment Grade Credit Default Swap Index 55.42 -3.92%
  

• European Financial Sector Credit Default Swap Index 60.34 -7.9%
  

• Emerging Markets Credit Default Swap Index 232.87 -1.24%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 83.0 unch.

• M1 Money Supply $2.826 Trillion -.14%

• Commercial Paper Outstanding 1,053.90 -.10%

• 4-Week Moving Average of Jobless Claims 315,000 +750

• Continuing Claims Unemployment Rate 2.0% unch.

• Average 30-Year Mortgage Rate 4.12% -2 basis points

• Weekly Mortgage Applications 347.30 -.23%

• Bloomberg Consumer Comfort 36.4 -.7 point

• Weekly Retail Sales +3.30% -10 basis points

• Nationwide Gas $3.66/gallon -.02/gallon

• Baltic Dry Index 893.0 +7.46%

• China (Export) Containerized Freight Index 1,097.12 +.46%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 27.50 -8.33%

• Rail Freight Carloads 264,766 -2.86%

Best Performing Style

• Small-Cap Growth +2.7%

Worst Performing Style

• Mid-Cap Value +1.0%

Leading Sectors

• Computer Hardware +4.2%

• Steel +4.0%

• Biotech +3.6%

• Semis +3.5%

• Computer Services +3.5%

Lagging Sectors

• Restaurants +.2% 

• Coal +.1%

• Energy unch.

• Oil Tankers -.5%

• Utilities -2.8%

Weekly High-Volume Stock Gainers (34)

• HNRG, ISLE, AMED, PETX, SFLY, PKE, GBX, IMMR, PPC, XONE, SHLM, TAT, CARB, DTSI, MBWM, PAG, PRGS, EFII, SNOW, CNC, LNDC, ELRC, CTG, DEPO, SRDX, HAIN, SGNT, EOPN, MVC, AMSG, RSE, NEWP, SPB and ALR

Weekly High-Volume Stock Losers (15)

• MODN, GLRI, MNKD, ROCK, CAMP, IBCP, FNHC, LRN, TTS, CBSO, MBI, AYI, AXDX, STAA and MRTX

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change